India-Canada Diplomatic Tensions- All You Need to Know

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The bilateral ties between India and Canada have recently witnessed significant strains. The tension between the two countries escalated following certain incidents and statements post the G20 Summit. These issues have ramifications not just diplomatically but also economically.

This topic of “India-Canada Diplomatic Tensions- All You Need to Know” is important from the perspective of the UPSC IAS Examination, which falls under General Studies Portion.

Recent Developments

  • Canadian Prime Minister Justin Trudeau’s visit to India and his discussions with PM Narendra Modi.
  • India conveyed its concerns regarding anti-India activities by extremist elements in Canada.
  • The two nations suspended negotiations on a bilateral free trade agreement.
  • Allegations by Trudeau about India’s involvement in the killing of Khalistani terrorist Hardeep Singh Nijjar.
  • The expulsion of top diplomats from both countries.

Economic Implications

Free Trade Agreement

  • Canada recently halted talks on the Comprehensive Economic Partnership Agreement (CEPA) with India.
  • In March 2022, both countries planned to re-launch the CEPA negotiations considering an interim agreement.
  • Focus sectors: goods, trade remedies, rules of origin, services, institutional, and core provisions.
  • Benefits of such agreements include duty-free access, liberalised trade norms, and boosted investments.
  • Potential economic impact: CEPA could enhance two-way trade by approximately $6.5 billion.

Bilateral Trade

  • Trade growth reached $8 billion in 2022.
  • Major goods: India exports consumer goods, garments, engineering products to Canada and imports energy products and fertilizers.
  • Notable corporate ties: Over 600 Canadian firms operate in India and more than 30 Indian tech giants have invested in Canada.

Canadian Investments in India

  • Canada is the 17th largest foreign investor in India with investments over $3.6 billion since 2000.
  • Major investors: Canadian Pension Funds and Ontario Teachers’ Pension Plan.

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Human Ties

  • Canada houses one of the largest Indian diasporas.
  • Significant Sikh population in Canada, the highest outside Punjab.
  • Indian students form a significant percentage of international students in Canada.


  • Pro-Khalistani groups in Canada are a point of contention, involved in anti-India activities and temple desecrations.
  • Recent incidents like parades depicting the assassination of Indira Gandhi and other anti-India activities have further strained the ties.
  • Despite India’s concerns, Canada’s stance on peaceful protest and freedom of expression remains firm, leading to differences.

Leaders’ Statements

  • PM Modi emphasized concerns over extremist activities in Canada.
  • Trudeau reiterated Canada’s commitment to freedom of expression, peace, and combating hatred.

Historical Context

  • Canada-India relations have oscillated over the years.
  • Shared interests during the Cold War gave way to differences over nuclear programs and other geopolitical events.
  • Trade and investment have become focal points in recent years, but diaspora politics continues to influence the relationship.

Diaspora Dynamics

  • Pro-Khalistani views and separatist activities in Canada trouble the Indian government.
  • Digital technologies have intensified the engagement of Indian diaspora, leading to global repercussions.
  • Diaspora politics has sometimes overshadowed national security and foreign policy interests for Canada.

Way Forward

Addressing the complex challenges requires:

  • A deep introspection into how both nations perceive and engage with the Indian diaspora.
  • Mitigating the negative influences of certain diaspora elements.
  • Strengthening mutual interests like climate change, global health, digital technologies, and artificial intelligence.
  • A focus on collaborative projects, mutual respect, and open dialogues.


The recent strains in India-Canada relations highlight the complexities of diplomatic ties intertwined with diaspora dynamics. For a fruitful future, both nations need to rise above the immediate challenges, focusing on shared interests and mutual growth.

Practice Question for Mains

Examine the reasons behind the recent diplomatic tensions between India and Canada. What are the implications? (250 words)

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